It's a bidirectional relationship. The value of gold actually remained stable when the U.S. dollar was pegged to it. I view that as evidence for pegging stabilizing the value of the commodity it is pegged to. However is an simplification, because share of the dollar relative to other currencies policies has changed. I also only believe the system I depicted would work, if the exports of the commodity were restricted so that no one or only the central bank could sell it abroad.
kasey_junk|11 months ago
But you can see that inflation (and worse deflation) had volatility when the us was on the gold standard: https://www.investopedia.com/inflation-rate-by-year-7253832
If you dig into the 1800s the volatility was even worse.
Xen9|11 months ago